Thursday, January 20, 2011

The Fisch Bowl

Carl Fisch is a teacher at Arapahoe High School in Centennial, Colorado and put together this wonderful presentation on the pace of change.

Tuesday, January 18, 2011

Sharing the wealth

I received 5 emails this AM promoting different crowd enabled discounts for restaurants, nail salons, and kids birthdays. Each invitation was for the benefit of a small business which I had never before frequented. It got me thinking.

It's amazing the shift we have seen in the past three years in company creation. We are witnessing history's fastest growing firms across multiple segments:

Entertainment company- Zynga

Communications company- Twitter

Commerce company- Groupon

New market (social networking) with a huge leader, Facebook

Delving a bit deeper, it seems as if the elusive riches to be garnered by providing useful marketing and lead generation services to the 4+mm Small and medium sized businesses (SMB) will finally be cracked. We have seen a glimmer of this opportunity with the success of Constant Contact (CTCT). This public nearly $900mm market cap company has served more than 150,000 customers with its ubiquitous e-mail marketing solutions. Historically, the three largest obstacles to success in the market were architecting a truly easy to use solution at a reasonable price, surmounting the high cost of customer acquisition, and dealing with high customer turnover (churn).

In the past two years multiple local oriented options have become available to businesses, led by search (cross platform) and display; but now expanding to social, email, group buying, affiliate, and mobile advertising programs. Each has great merits to help SMB's reach their potential customers more efficiently. Though not directly competitive, each market will also vie for the same marketing budget allocation. I suspect we will see a dramatic shift/rise in SMB spending; first away from local print and later split amongst print and more accountable mediums.

Thursday, January 6, 2011

Short video on Why Facebook was valued @$50B

The numbers are huge, especially the new friend requests and invites:

Wednesday, January 5, 2011

Generation skipping

Goldman was once the gold standard for technology banking. They had lead relationships with IBM, lead the Microsoft IPO, then missed the Internet when Rick Sherlund left for an ill fated Hedge stint and saw Morgan Stanley's Mary Meeker grabits mantle.

The Facebook deal puts them back in the pole position. Using capital as a weapon, smarts as currency and courage in its convictions, Goldman has bought and clawed its way back to the top. The deal highlights entree, exclusive distribution and a great ability to connect the dots.

They missed a generation, but are back.

You'll love the video link:

A guy walks into a gym and

sees a pharmacist, a jeweler, a publisher and a toy store owner.

This is my weekend basketball game restricted to non-athletic, trash talking never-beens who enjoy communal grabbing, sweating and cussing. Losers hit the sideline and talk business and Sunday's chatter was really illuminating.

The pharmacist is using Constant Contact for e-mail communications to customers ($30/month for 1500 mails). He's fixated on maintaining market share vs the big boys as CVS and Costco are mere short drives away. His challenge is to attract new customers, while differentiating his store with a service oriented mantra and he's experimenting with $100 thank-you coupons for people who refer friends who fill prescriptions at his store.

The jeweler has an online presence which lists inventory, but no prices. He does not want his walk-in customers to know they can get better prices from him on-line. He has no lead generation or prospect tracking system. He's really interested in figuring out what to do as more of his customers are flocking to eBay and Blue Nile.

The publisher puts out a quarterly free advertising supported glossy hyper local tome that concentrates on fashion, home/landscaping, and charity functions. His 2 person sales force doubles as editor and photographer. They have limited online presence as he's just not sure how he would drive traffic to the site and whether readers and advertisers will have the same positive sensation looking at the layouts online vs holding the glossy paper. Nonetheless, he's trying to figure out how to value a premium domain name, in the heart of his geography, which just became available. Asking price is $10k and unique organic traffic is in the upper hundreds per month.

The toy store owner has a monthly online ad budget. He's just shifted 50% of his spending from GOOG Adwords to Facebook. The ability to target his offers by gender, age and geography has produced encouraging, albeit early results. He's looking for a central dashboard to monitor all his programs (mail, GOOG, FB, and email).

It's so clear that small business owners are grappling with a sea change in the way they reach and maintain their customer relationships. They are willing to experiment, but feel like the sightless in a savage land. What is clear is that Groupon's early success is but the tip of the iceberg that will float many entrepreneurial ships carrying small business owners into the digital age.

Tuesday, January 4, 2011

The circle game

I met with a few fellow software/internet investors and the oft discussed topic of the 'web is dead' long live mobile applications came up. Elad Baron of PlumWillow also brought up the subject recently.

In the '80's application software heralded the death of timesharing. Then, in the late 90's desktop software was declared dead as it was thought browsers would support rich applications delivered by huge pipes. This did happen but these cloud based applications provided a different type of an experience, one that was more information and real-time oriented. Information at my fingertips was redifined and broadened; it was now the world's information. This had the effect of slowing the growth of desktop software, but not obviating the need for it. The market expanded in a way that forecasters didn't expect and grew much larger than most dreamed.

The rise of mobile applications are again changing our computational behavior. From my own experience, I am spending less time on my desktop and more on my fingerheld PC (aka a smart phone). I have 52 applications installed on the device, yet this pales compared to my kids and many of my peers. These applications are for the most part quite different from a generation ago in that they rely upon the internet to be valuable. A combination of instant updating, 'social' awareness, and GPS functionality has greatly expanded their utility. In fact, it's getting more difficult to determine when I am in an application or when I'm using the web to search through Yelp, my mail, or to read the news.

It seems as if the market is again expanding in unexpected ways. It's 'dead' if the area you have focused on has stopped growing, or is shrinking. It's a new world, if your market is growing.

Monday, January 3, 2011

Looking forward again

I've just completed my annual exercise of looking at the new technology devices/applications I have adopted during the just completed year. I don't think it's as expansive as last year, but quantity may not be the indicator of the extent of the platform shift we are seeing as fingertip held computers exploded on the scene last year. At last count 700,000 'smart phones' were being activated each DAY based on the Apple, RIM and Android platforms. Gone from the conversation, but still trying are are Nokia, MSFT and Ericsson. Each frantically trying to carve out a reason for existence in a market which is passing them by.

Here's the cosmic new list:

1. I became an Apple fanboy. First it was the ultimate convergence device the iPad. It united my TV viewing, news reading, and communications. To the dismay of my wife, they united at all hours in my bedroom. Jobs is right, the device is magical and his comments on the introduction when he said that he's not sure how it's ultimately going to be used, gave great insight into how an entrepreneur's passion can win...over the bean counters.

1a. The applications on the iPad, with its gesture based control, are magical too. Of special note are Star Walk for astronomy, The WSJ, NPR, Google Voice and my favorite, DoodleJump. Of course, Findmy phone willbe the one that will save my bacon.

2. After a brief fling with a Samsung Android device powered (though the right word is crippled) by Verizon, I adopted the iPhone. It's really extended the internet to my mobile fingertips and, unlike Blackberry usage, it's now 80% web/application based, rather than 80% mail used. Ever notice how folk in elevators now are buried in their screens and no longer look at shoes?

3. Facebook Social graph introduced in April and has transformed the application into a platform which is integral to the success of a host of follow-on applications. So far, I've enabled 22 applications to interact with my Facebook social grid. It looks as if the 'social dial tone' is the operating system of this decade.

4. Played with many applications in Google Labs. The list expanded from 5 pages to 7 pages of tools, trifles and applications

5. Dropped using the Kindle as the iPad implementation is good enough

6. Installed Adobe Photoshop Elements 9. Amazing to see how a version 9 of anything can be so replete with bugs as to be practically unusable.

7. Began using bar codes to get more information/prices on items. Scanbuy Redlaser and TheFind are the three I use most often. They are so different and each has its strength/weaknesses.

8. Watched my daughter create an outfit, get comments from her friends, then purchase a pair of shoes on PlumWillow

9 . Geo location based capability is no longer unique many of my applications have them and if they don't they shortly will. Leading the list of most useful is Yelp's implementation.

10. Donated my daughter's Nintendo DX. Fingercomputing, and it's drive towards 'permacheap' applications and functionality has obsoleted this device.